More than a decade after the OneCoin scam began, victims are now eligible for compensation from a $40 million fund of seized assets, as announced by the US Department of Justice. The international cryptocurrency investment scheme, which defrauded up to 3.4 million investors worldwide, was operated by Ignatova and Karl Sebastian Greenwood, co-founders of OneCoin Ltd., between 2014 and 2019. The scheme involved the sale of a fraudulent cryptocurrency through a global multi-level-marketing network, with investors losing over $4 billion.
The operation was found to be a ponzi scheme, with the value of OneCoin manipulated through automatic generation of new coins. The DOJ has described it as "one of the largest global fraud schemes in history". In recent developments, the DOJ has offered a $5 million reward for the missing Cryptqueen, while Greenwood has admitted to federal wire fraud and money laundering charges.
According to US Attorney Jay Clayton, the founders of OneCoin "sold a lie disguised as cryptocurrency", resulting in losses of over $4 billion worldwide. The DOJ will continue to work towards seizing criminal proceeds and prioritizing the return of funds to victims. This development comes after the FTX Recovery Trust announced its plans to distribute $2.2 billion to creditors, as part of a broader effort to recover assets for users of the collapsed crypto trading platform.